In a significant reform measure, the Power Ministry on Friday said it has amended the Electricity (Rights of Consumers) Rules, 2020, making two significant changes — the introduction of Time of Day (ToD) tariff, and rationalisation of smart metering provisions.

“Rather than being charged for electricity at the same rate at all times of the day, the price you pay for electricity will vary according to the time of day,” the Ministry said. Power Minister RK Singh said the ToD is a win-win for consumers as well as the power system.

The TOD tariff, comprising separate tariff for peak hours, solar hours and normal hours, send price signals to consumers to manage their load according to the tariff. With awareness and effective utilisation of this mechanism, consumers can reduce their electricity bills, he added.

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The Minister said since solar power is cheaper, the tariff during solar hours will be less. During non-solar hours, thermal and hydropower as well as gas-based capacity is used. Their costs are higher than that of solar power — this will be reflected in Time of Day tariff.

“The ToD tariff will improve the management of renewable generation fluctuations, incentivise demand increase during the periods of high RE generation and thereby, increase grid integration of larger quantities of renewable power,” Singh added.

Change in tariff

Under the ToD Tariff system, the tariffs during solar hours (duration of eight hours in a day as specified by State Electricity Regulatory Commission) of the day shall be 10-20 per cent less than the normal tariff, while the tariff during peak hours will be 10-20 per cent higher.

The ToD tariff would be applicable for commercial and industrial (C&I) consumers having maximum demand of 10 KW and above, from April 1, 2024, and for all other consumers except agricultural consumers, from April 1, 2025. The tariffs shall be made effective immediately after installation of smart meters.

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Industry welcomes new norms

Vibrant Energy CEO Srinivasan Vishwanathan said it is a welcome step in building a market-based pricing model for the Indian electricity market.

“So far, the current market structure didn’t have a mechanism to price the supply-demand mismatch. Introducing ToD pricing signals will also encourage an active stationary storage market as well as projects will try to seek to shift the power delivery timing. Vibrant has always anticipated that the Indian electricity markets will benchmark to global standards and hence, has been offering round-the-clock renewables through its ISTS-based wind-solar hybrid projects for its corporate customers,” he added.

Nangia Andersen Partner (Power Advisory), Arindam Ghosh, said this is a very strong message from the government. It is to acknowledge that the growing nature of connected devices, self-generation and energy management options means that customers have a central role to play in the future of the grid.

“This should be taken as the first step. For future course, ToD design should include cost of service study including results from recent load research studies by customer class. The future ToD tariff should include significant saving opportunities for customers by ensuring that off-peak rate is substantially lower than on-peak rate. Therefore, we have to also move towards Time of Use (ToU) pricing supported by critical peak pricing of power. This will incentivise demand response and enable peak load saving and sending time-sensitive price signals for EV charging, and avoiding system overloading during peak hours,” he added.

Smart metering

The Ministry also simplified the rules for smart metering. To avoid inconvenience to and harassment of consumers, the existing penalties for increase in consumer demand beyond the maximum sanctioned load or demand have been reduced.

“As per the amendment in metering provision, post-installation of a smart meter, no penal charges will be imposed on a consumer based on maximum demand recorded by the smart meter for the period before installation date,” it added.

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Load revision procedure has also been rationalised in a way that maximum demand shall be revised upwards only if sanctioned load has been exceeded at least three times in a financial year. Moreover, smart meters shall be read remotely at least once a day and the data shall be shared with consumers in order to enable them to make informed decisions about consumption of electricity.

Power Ministry sources said under RDSS, the Ministry has sanctioned 3.01 crore smart meters so far, to Tamil Nadu Generation & Distribution Corporation (Tangedco), which is through the nodal agency, REC. Tamil Nadu has floated tender for the smart meter project and successful bidders will be finalised by next month.

As per the National Smart Grid Mission, as many as 1,25,510 smart meters have been installed, against 1,40,849 sanctioned till June 16, 2023. Sources said this is part of the smart city project in the State.